The localization of chitin in yeast cell walls was studied by fluorescence and electron microscopy, with the use of specific markers attached to fluorescein or colloidal gold, respectively. Chitin was also labeled by incorporation of (14C)glucosamine in growing cells. The results confirmed that most of the chitin is in primary septa and that its distribution on the septum is uniform. Some chitin (7-8% of the total) is dispersed over the cell wall. Further studies on the regulation of yeast Beta(1 yields 3) glucan synthetase have shown that both ATP and GTP activate the enzyme, but by different mechanisms. GTP seems to act by simply binding to the enzyme or to a regulatory subunit. ATP, on the other hand, would modify, in an enzymatically catalyzed reaction, a small molecular weight compound attached to enzyme, thereby converting it into an activator. The effect appears to be reversible, inasmuch as incubation with Mg ions of highly active enzyme, prepared in the presence of 5-10 mM EDTA, leads to an inactivation, which can be reversed either by ATP or GTP. It is suggested that this reversible activation process may be of great importance for the regulation of cell wall growth in vivo.